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MUNICIPAL SYSTEMS IMPROVEMENT GRANT SELECT COMMITTEE ON FINANCE 10 OCTOBER 2007. Background of MSIG. A conditional grant to support municipalities in building in-house capacity to: - Perform their functions - Stabilize institutional and governance system
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MUNICIPAL SYSTEMS IMPROVEMENT GRANTSELECT COMMITTEE ON FINANCE10 OCTOBER 2007
Background of MSIG • A conditional grant to support municipalities in building in-house capacity to: - Perform their functions - Stabilize institutional and governance system • The focus of the grant is on:-Local and Economic Development, Financial Viability, Institutional Development, and Good Governance • Grant maintained at R200 mil per annum until 2009/10 • For 2007/08 number of receiving municipalities increased from 211 (2006/07) to 254 municipalities
Comparison: Receiving Municipalities 2006/07 & 2007/08
Actual Expenditure by Provinces against Funds transferred at 31 Sept 20072006/07 Allocation
Actual Expenditure by Provinces against Funds transferred at 31 Sept 20072007/08 Allocation
Reasons for Variance in the 2007/08 Expenditure Performance • Allocations transferred to qualifying municipalities in July 2007 in accordance with the NT approved payment schedule. • The dplg withheld 2007/08 MSIG allocations (R 25,585 million) for 27 municipalities due to non –reporting and or under spending on the 2006/07 grant as prescribed by Sec 25 of the DoRA. - Of the withheld amount of R 25 million, an amount of R 4,803 was transferred in August 2007 for those municipalities which responded to the withholding letter. - An amount of R 10,782 still withheld and will be transferred in November 2007 • Municipalities still spending the 2006/07 balance of the allocation
Challenges in the administration of Grant • Late submission of Activity Plans by municipalities which then result in delays in allocation and approval process; • Late and/or non sub-mission of MISG expenditure reports by municipalities resulting in MFM not being able to ascertain whether the projects have been implemented or not.
Specific Areas of Non-Compliance with DORA • High staff turnover at municipal level especially with regards to CFO’s, which affects the sign-off of expenditure reports. • Continued culture of non-reporting or consistent reporting by receiving municipalities.
Steps taken to address Non-Compliance • Withholding letters addressed to all concerned municipalities in July 2007 regarding the 2007/08 allocations; • Negotiated for amendment of payment schedule to August 2007 and approval was sort from National Treasury; • District-wide bilateral meetings ongoing an a quarterly basis with the Provinces, Districts and Local Municipalities; and • Deploying an MSIG Response Team members to assist individual municipalities with compiling expenditure and quarterly reports as well as general support on the implementation of business plans
Collaboration and Coordination with other sectors • Agreement with DWAF on provision of resource team to augment the dplg current MSIG Administration capacity • Working relations with Provincial Departments of Local Government – Dedicated provincial official for monitoring of MSIG in the province
